Bring In the Inspectors

In order to assess the impact of occupational and health practices in the state of California, Levine et al. (p. 907) compared more than 400 uninspected firms with a matched set of inspected firms that were chosen at random. Employees at the inspected firms were less frequently injured and, consequently, the inspected firms suffered fewer injury-related costs. Encouragingly, there were no significant differences in other economic outcomes, such as sales and employment levels, between control and inspected firms.

Abstract

Controversy surrounds occupational health and safety regulators, with some observers claiming that workplace regulations damage firms’ competitiveness and destroy jobs and others arguing that they make workplaces safer at little cost to employers and employees. We analyzed a natural field experiment to examine how workplace safety inspections affected injury rates and other outcomes. We compared 409 randomly inspected establishments in California with 409 matched-control establishments that were eligible, but not chosen, for inspection. Compared with controls, randomly inspected employers experienced a 9.4% decline in injury rates (95% confidence interval = –0.177 to –0.021) and a 26% reduction in injury cost (95% confidence interval = –0.513 to –0.083). We find no evidence that these improvements came at the expense of employment, sales, credit ratings, or firm survival.